Sweden Inflation

Sweden: Inflation steady in November

December 11, 2015

In November, consumer prices fell 0.2% over the previous month. The result contrasted the 0.1% increase recorded in October and was below market expectations of a flat reading. According to Statistics Sweden (SCB), lower prices for package holidays, international travel and vegetables drove November’s result.

Inflation in November was unchanged at October’s 0.1% increase. November’s tally marks the fourth annual increase in prices since May and will ease pressure on the Central Bank, which has been combatting falling prices with unconventional policy measures, including negative policy rates and a government bond-buying program. Annual average variation in consumer prices held at minus 0.1% in September for the ninth consecutive month.

Meanwhile, annual core inflation—defined as the CPI with mortgage rates held constant—was 1.0% in November, which was slightly down from the 1.1% increase tallied in October.

The Central Bank expects inflation to average 1.3% in 2016 and sees it picking up to 2.5% in 2017. Met the why particular Consensus Forecast panelists expect inflation to average 1.3% in 2016, which is unchanged from last month’s forecast. For 2017, the panel sees average inflation at 2.1%.

Author:Robert Hill, Economist

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Total industrial production excluding energy rose a seasonally-adjusted 0.9% in November over the previous month according to Statistics Sweden (SCB), down from October’s revised 2.0% rise (previously reported: +1.9% month-on-month).

The economic tendency indicator declined from a revised 113.8 in November (previously reported: 114.1) to 112.5 in December according to the National Institute of Economic Research (NIER), marking the ninth successive month above 111.0.